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Hold on, investors. We're going down! Traders work on the floor of the New York Stock Exchange (NYSE) on February 2, 2016 in New York when the Dow fell nearly 300 points on renewed fears over the health of the global economy and another drop in oil prices. (Photo by Spencer Platt/Getty Images)

We're going negative! Everyone else is doing it, so why not us?

It's a call by more than a few investment firms over the past two weeks. CNBC is loaded with them. Some want it. Others don't.

What appears obvious now is that Western banks need Central Bankers magic money making machine to survive. It's a bad relationship, renown short selling fund manager Marc Faber said recently. Bill Gross said the same thing again about negative rates on Wednesday. Investors are still in no man's land. We've got monetary policy tightening in the U.S., and loosening in Europe, Japan and probably negative rates coming at the Bank of England. The global economy, helped along by American dynamism and China's hunger for commodities, is not what it used to be. The dollar is in the only game in town. So much for asset allocation.

But for how long will the dollar be this strong? Try to imagine what the unwinding of the strong dollar trade looks like, as we currently witness the unwinding of the QE trade so far this year in the U.S. The fix is in. It's the end of the world as we know it.

Wall Street wants more quantitative easing. Europe is sticking with negative rates to help capitalize its over-levered banks who can then keep consumer credit cheap, while getting free cash from the European Central Bank to lend to them. Consumer credit, mortgages, are still between 2% and 5%. Pension funds and life insurance firms, staples of the global fixed income market, have been forced to allocate to government bonds paying nothing.

It's driven the euro down nearly 30% against the dollar. As one banker in northern Europe tells me, "negative interest rates are the biggest government support program to the banking industry ever."

We might not get QE here again. But negative interest rates at the Fed? That's looking more likely says Jan Dehn, head of research at Ashmore in London.

In its annual stress test for 2016, the Fed said last week that it will assess the resilience of big banks to a number of possible situations, including zero interest rates.

U.S. companies are growing more concerned about a recession. So far this year, the number of companies whose executives have mentioned recession concerns to analysts and investors is up 33% from the same period a year ago; the first such increase since 2009. Some 92 companies have discussed a recession in their earnings calls this year, Reuters reported.

U.S. factory orders for December -- Christmas time -- fell 2.9% on Thursday, marking the 14th monthly drop in year-over-year factory orders. If a recession comes, the Fed will not raise rates. If they have to lower rates, guess where it goes?

"Moves to negative rates in both the U.K. and the U.S. seem only a question of time," says Dehn.

The Bank of England's chief economist Andy Haldane signaled as recently as September that negative rates could become necessary in the U.K. while the only remaining easing instrument available to the Fed – having already stated categorically that additional QE was counter-productive – is negative rates.

The Fed's Open Markets Committee (FOMC) meeting minutes issued last week showed that the Fed is now retreating at a record pace from the optimistic rhetoric of U.S. growth and four rate hikes this year. The FOMC removed its reference to a ‘balanced’ outlook, which means that it has no idea what is coming next.

"The ship is sailing without a rudder," says Dehn. "Unsurprisingly, capital markets greeted the this month's move by the Bank of Japan and eventually the FOMC minutes with optimism. Sadly, such excitement is prima facie evidence of severe myopia, a disorder that infests the entire Western capitalist system to the core and whose long-term consequences can be unsettling to say the least."

This myopia described by Dehn is when investors fail to recognize that economic recovery based on free money ends up being a vicious cycle. Monetary easing alone does not address a raft of serious economic problems -- from demand destruction for raw materials and oversupply in China, to labor markets and bank saving deposits in Europe and Japan. Over time, when these problems associated with negative rates and QE are added to the pre-existing ones, they require even more monetary stimulus to survive.

"One would think that the bull market in U.S. equities for the past seven years would have led to higher growth, but even with QE the U.S. didn't grow out of recession like it used to," says Lori Heinel, the chief portfolio strategist for Global Advisors, a $2 trillion asset management firm in Boston. Heinel points out that the U.S. economy has historically averaged 4% growth after a recession. It grew a little more than half that.

The end-result of negative rates and QE-to-infinity might end up being the mass-destruction of wealth.

Long-term institutional investors -- from European life insurance firms to American teachers unions -- should be cognizant of what negative rates imply to their savings.

Tim Cook, chief executive officer of Apple. We lost "this much" because of the strong dollar. Estimate: $5 billion. (Photo by David Paul Morris/Bloomberg)

Negative Impacts

Easy monetary policies are designed to get banks to lend and consumers to borrow, creating more leverage, which is what got many of the core economies into trouble in the first place. Most of the leverage is in the banking sector as consumer spending has been relatively tepid. Meanwhile, government debt burdens have gone up sharply since 2008-09. Only when debt is repaid or written down and losses taken can debt really go down.

When monetary policies are used to excess in countries that face debt challenges they quickly lead to new problems. Currencies and financial asset prices become heavily distorted relative to fundamentals. Enormous bubbles are being created in commercial real estate in London and New York, where luxury apartments are becoming the Western version of Chinese ghost cities.

In manufacturing, companies are foregoing long-term investment. Others are hoarding cash. The economy loses dynamism, as a result, the only companies that seem to exist in the financial press are , and .

In currency markets, the U.S. dollar has become a victim of its own success. It's rallied on expectations of rate hikes and growth. But it is now so strong that companies like beloved Apple are losing billions and rate hikes are unwelcome. The U.S. is at risk of becoming an oil importer again, beholden to unsavory Saudis who have pumped their oil wells with abandon with the stated purpose to pressure American shale oil and gas out of the market.

Long U.S. dollar positions have become the single largest speculative position in global currency markets today. And this is all occurring at a time when the odds of a U.S. recession are rising sharply -- if one believes the Reuters screen on corporate earnings calls this year.

Doom and gloom is back with a vengeance.

"The bubbles created by excessive monetary easing in the QE economies will burst," Dehn warns from his offices in London. They will either burst through inflation or through the collapse of QE currencies or both. "When they do...the economic consequences will be horrible."